Key Takeaways
- Dan Ives from Wedbush named Palantir his preferred software investment beyond the Magnificent Seven, highlighting Q4 performance as “stunning”
- The analyst believes AI development is merely in its “third inning,” with U.S. government contracts potentially scaling to trillions of dollars
- Approximately $20M in revenue moved from the commercial segment to government, affecting commercial figures, though Ives views this as a non-recurring adjustment
- Despite falling over 17% year-to-date in 2026, PLTR trades beneath its five-year historical average across multiple valuation metrics, carrying a forward P/E of 132x
- Analyst consensus indicates a “Moderate Buy” recommendation with an average price target of $195.04, suggesting approximately 32% potential upside
Wedbush analyst Dan Ives made bold statements during a recent CNBC appearance, positioning Palantir as his preferred software investment outside the Magnificent Seven cohort while arguing the artificial intelligence boom has substantial room for expansion.
Palantir Technologies Inc., PLTR
Ives employed a baseball metaphorāclaiming we’re in the “third inning”āto counter growing concerns about an AI market bubble. His perspective: the artificial intelligence cycle is gaining momentum rather than approaching exhaustion.
Although PLTR shares have declined more than 17% during 2026, Ives characterized the company’s latest quarterly performance as “stunning” and positioned Palantir in “a whole other category” relative to competing software enterprises.
The equity has retreated from elevated valuations and currently trades beneath its five-year historical average across several valuation metrics. However, a forward price-to-earnings ratio of 132x remains substantially above market averages.
Palantir reported fourth quarter fiscal 2025 revenue of $1.41 billionārepresenting 70% year-over-year growth. U.S. revenue specifically reached $1.08 billion, expanding 93% compared to the prior year period.
Full-year 2025 revenue totaled $4.475 billion, climbing 56% year-over-year. GAAP earnings per share for Q4 registered $0.24, while full-year GAAP EPS landed at $0.63.
Addressing the Commercial Segment Concerns
A criticism directed at Palantir’s most recent quarter centered on commercial revenue underperforming expectations. Ives quickly provided contextāapproximately $20 million shifted from the commercial category to government due to a single contract reclassification.
He characterized this as an accounting adjustment rather than an indicator of underlying business deterioration. Government AI demand, according to his analysis, represents the narrative investors should prioritize.
Ives labeled U.S. government artificial intelligence expenditure “the golden goose.” He projected contracts could reach hundreds of billions in the near term, with long-range potential extending into the trillions.
“For many of these software enterprises, government-related business could potentially double within the next two to three years,” Ives stated during his CNBC interview.
Cybersecurity and Agentic AI Development
Ives additionally highlighted cybersecurity as a major beneficiary of artificial intelligence infrastructure expansion. He projected security budgets could surge 50% as agentic AI creates increasingly sophisticated threat landscapes.
He characterized it as “the most connected trade” he’d observedāindicating the AI infrastructure expansion and corresponding security expenditure requirements are intrinsically intertwined.
Regarding regulation, Ives expressed doubt that oversight would materially decelerate industry progress. He argued technological advancement was outpacing any regulatory framework’s ability to respond effectively.
Palantir’s forward outlook projected Q1 2026 revenue between $1.532 billion and $1.536 billion. Full-year 2026 revenue guidance spans $7.182 billion to $7.198 billion.
U.S. commercial revenue specifically is forecast to exceed $3.144 billion for the complete year.
Rosenblatt Securities maintained a Buy rating on PLTR with a $200 price target on April 24. Mizuho preserved its Outperform rating while reducing its target from $195 to $185.
Across 28 analysts, the consensus recommendation stands at “Moderate Buy” with a mean price target of $195.04āapproximately 32% above current market levels.
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